WASHINGTON (7/10/13)--The Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency on Tuesday approved interim final rules to implement Basel III regulatory capital reforms in the United States, joining the Federal Reserve, which approved its own final rules earlier this month.
The Basel III changes "will create a stronger, more resilient industry better able to withstand environments of economic stress in the future," FDIC Chairman Martin Gruenberg said.
The international bank rules, which will require banks to hold more capital as a buffer against future financial shocks, do not apply to credit unions in the United States. In general, the Basel III standards are intended to apply to "internationally active" banks, but can be applied to credit unions in other countries as well.
Basel III standards for banks in the United States will require common equity of 4.5%. Banks also must hold a 2.5% conservation buffer, which will be gradually introduced, and to increase their Tier 1 levels from 4% to 6%. The rule includes a minimum leverage ratio of 4% for all banking organizations.
The phase-in period for smaller, less complex banking organizations will not begin until January 2015 while the phase-in period for larger institutions begins in January 2014.
The FDIC also approved a joint interagency Notice of Proposed Rulemaking to strengthen the supplementary leverage requirements for large, systemically important financial institutions.
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